Ans 3)

Pros of switching –

• Enhanced productivity
• Increased motivation to achieve more installation targets
• Help in combating the lack of drive to work efficiently
• Defined and clear distinction of responsibilities and pay for managers
• Saved money and achieved profitability – as there is no agreement to pay fixed wages unless
eight-hours’ work is done

Cons of switching –

• Low employee satisfaction – due to unreliable/risky incomes

• Guarantee-rate cut would result in huge turnover, further impacting customer services
• It’s a highly risky decision – trade-off between high productivity and high turnover
• Seasonal Business – Since the business depends on seasonality, the PPP change would
impact the income of employees adversely based on the installations done during slow
forecasts. They won’t feel it to be a justified pay cut.
• External and uncontrollable factors (miscommunications, operations, scheduling errors,
inclement weather) resulting in low productivity would impact employee’s pay
• Increased dependency of technicians/installers on CSRs, drivers, employees at
manufacturing plant
• Employees would be more concerned with quantity of work rather than quality
• Employee retention would be a problem

Yes, installers could be good candidates for piece-rate pay, but the new PPP needs some
modifications. Reasons for its suitability are – enhanced productivity, seriousness in doing the work
with minimal mistakes, motivation to work more.

Reasons why the current plan needs a modification and might not be a good decision in the interest
of technicians/installers is that their pay is directly dependent on their productivity. But their
productivity depends on a lot of other factors which they could not control, some of those being –

• Seasonality effect
• Most of the times installers are miscommunicated
• Unavailability of customers
• Scheduling errors

Employees won’t be willing to take such risks with their incomes because of dependencies on those
who are not a part of the PPP plan and other uncontrollable factors. This would make them insecure
and create a feeling of unjust allocation of rates among them.

Modification required – Removal of 12-week guarantee rate-cut from the new plan.

So, if the 12-week guarantee rate cut is removed, it could be an effective plan for installers. A
minimum guaranteed pay would help them focus on the installations without making them worry
about the rate cut due to external factors which are not in their control. They would further be
motivated to perform efficiently to earn the benefits and incentives of piece-rate pay.
Ans 4)

A comprehensive pay plan should be devised that not only drives performance but retains
employees as well. Some of the recommendations would be –

• Remove the 12-week guarantee rate cut. A minimum guaranteed pay would help them focus
on the installations without making them worry about the rate cut due to external factors
which are not in their control. They would further be motivated to perform efficiently to
earn the incentives thereafter.
• For all levels of managers, they should focus in managing their branches. They should not be
eligible for PPP plan
• Set goals on the basis of busy and slow seasons